In Nevada Prison O.J. Simpson Keeps Tax Break on South Florida Home

O.J. Simpson might be a resident of the Lovelock Correctional Center in Lovelock, Nevada, but that doesn’t mean he’s out of luck for tax breaks. The South Florida appraiser’s office has determined that despite O.J.’s incarceration, he is still entitled to the Florida homestead exemption for his home in Kendall, FL.

The issue was raised when one of O.J.’s neighbors complained that the former professional athlete's residence in prison should preclude him from receiving tax break. Hey, I guess if O.J.’s still paying the bills, more power to him.

Now the miffed neighbor, David Weston, thinks someone in Tallahassee should take another look.

What bothers Weston, he says, is not so much the fact that it's Simpson getting the tax break, but more generally that state rules allow felons serving prison sentences -- even those doing so out of state -- to keep their exemptions.

``It doesn't seem right,'' Weston said. ``It seems that's a privilege of good citizenship, no?''

Florida Department of Revenue rules, which govern the homestead exemption, require that the property be the homeowner's primary residence. But the rules also clearly state that a felony conviction by itself doesn't disqualify anyone.

Continue reading at OrlandoSentinel.com...

New Jersey Democrats fail to extend millionaires tax

Do you think millionaires should be charged a hefty income tax? What if it was to solve one of the highest budget short-falls in history?

According to Reuters.com, New Jersey Democrats had wanted to reimpose a one-year, 10.75 percent tax on income above $1 million that would have hit 16,000 people. New Jersey's fiscal shortfall, at 37.4 percent of the current year's budget, is the second-highest among U.S. states, second only to Nevada, according to the Center on Budget and Policy Priorities. However, New Jersey Democratic legislators on Monday failed to gather enough votes to extend a tax on millionaires that would have been used to provide property tax relief for senior citizens and the disabled.

The millionaires' tax would have raised $637 million for rebate checks of up to $1,295 for some 600,000 senior citizens who would otherwise face steep increases in their property taxes during fiscal 2011.

Gov. Christie claimed the tax would keep the millionaire business owners from hiring in our tough economy. However, he proposed a constitutional amendment placing a 2.5 percent cap on annual increases in residential property taxes.

Read the full article here. Tell me what you think on Facebook or @ronideutch on Twitter.

The Tax Caps Cometh

Today, the Wall Street Journal published an online article exploring the different ways China and the US are using property taxes to stimulate the economy. China may be considering a property tax to “dampen” their possible housing bubble. Whether this will keep China from experiencing a housing crash is up for debate, but it certainly didn’t keep the US housing market from plummeting.

On the other hand, people in Indiana, New Jersey and New York may see reduced property taxes to help stimulate their local economies. Here are the facts as stated in the article:
In Indiana, Republican Governor Mitch Daniels has already lowered property taxes on homes to 1% of assessed value. In New Jersey, Republican, Governor Chris Christie has introduced a reform package that would cap property tax increases to 2.5% each year. And in New York, Democrat Andrew Cuomo has just announced his candidacy for governor with a call for a 2% cap on property tax increases.

So, will property tax caps help homeowners? Are the caps good? Bad? This article explains that it depends on how you think of government. If you see shortfalls in city and state budgets as a revenue problem, you probably think property tax caps are a bad idea. Alternatively, if you think of budget shortfalls as mostly a spending problem, you will see a property tax cap as a tool to control that spending.

Read the full article here.

Property Tax Rebellion Brewing After Real Estate Collapse

From ABC News.com:

Never judge a house by its tax bill. That's the lesson Don Newby, 65, is learning.

The construction manager from Gibbsboro, N.J., is paying boom-era property taxes on a home that has lost 20 percent of its value in the past three years. He blames the Gibbsboro tax authorities, which haven't reassessed property values in the town since 2003.

"That's absurd," says Newby, who pays $14,000 a year in taxes on a four-bedroom, bi-level modern house in the New Jersey township that's not far from Philadelphia. Newby, who was unemployed for a year following the economic collapse, claims the government is intentionally delaying new assessments to benefit from the lag as long as possible.

"When you watch how property values have come down, it appears I could save almost $2,000 in taxes."

Costly Lag in Assessing Property Values

Americans around the country are grumbling that local tax assessors haven't caught up with the real estate downturn, leaving homeowners with unfairly high property taxes. Many disgruntled homeowners including Newby are challenging authorities, either by appealing their tax bills or mobilizing groups to push for tax reforms.

San Francisco Sets U.S. Example by Using Property Taxes to Finance Green Upgrades

San Francisco Mayor Gavin Newsom signed new legislation yesterday allowing homeowners and businesses to finance eco-friendly upgrades through their property taxes. It is reported that the program is the largest of its kind, and the Mayor hopes it will start a trend among local government agencies. Supporters of the program hope it will create jobs in the San Francisco area as well.

"This green financing program is going to create green jobs and prompt the next wave of energy and water efficiency as well as renewable energy development in San Francisco," Newsom said in a statement. "It helps home and property owners overcome the large up-front costs of major environmental improvements."

Beginning in March, San Franciscans will be able to seek financing from the Property Assessed Clean Energy (PACE) program, which will make $150 million in bonds available, according to Renewable Funding, a private group that will put up the capital and administer the program at no cost to the city.

"San Francisco is once again leading the way by establishing the largest PACE program in the nation to date," said Cisco DeVries, president of Renewable Funding, based in Oakland.

Studies show that up-front costs are often the main barrier that keeps property owners from making green upgrades. PACE programs aim to remove that barrier.

Continue reading at USA Today.com…

House Passes Tax Extenders Bill

From ABC.com:

The House passed a bill Wednesday that would extend for one year more than $31 billion in tax breaks. Among the 45 deductions and credits for businesses and individuals, which are set to expire at year's end:

A sales tax deduction that mainly benefits people who live in the nine states without a state income tax. The states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming. Cost: $1.8 billion.

An additional standard deduction for state and local property taxes for taxpayers who don't itemize their deductions. Cost: $1.5 billion.

A deduction of up to $4,000 for college tuition and related expenses. Cost: $1.5 billion.

A deduction of up to $250 for teachers who spend their own money for books and other classroom supplies. Cost: $228 million.

A credit that helps businesses finance research and development. Cost: $7 billion.

Accelerated depreciation for improvements made to leased restaurant and retail property. Cost: $5.4 billion.

Additional depreciation allowance for businesses that suffer damage from a federally-declared disaster. Cost: $1.4 billion.

Questions for the Tax Lady: November 16th, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: Are Veterans exempt from paying property taxes?

Answer: It depends. There are a handful of different property tax exemptions available to Veterans – including the Veterans' Real Property Tax Exemption, the Cold War Veterans Exemption, and Alternative Veterans Exemption – which can exempt a Veteran from paying property taxes. However, some cities and county government agencies have opted out of the programs. To find out if you, or a Veteran you know, qualify for a property exemption then you should check with your local tax department. For more information on the topic, checkout this blog entry on the Tax Help Blog: Top 10 Tax Tips for Veterans.

Question #2: If I lose money on the sale of my property can I deduct it amount on my tax return?

No, losses from the sale of a personal residence cannot be used to reduce your taxable income. However, if the property was an investment and you did not live in it, then you may be able to claim a capital loss. Be sure to speak with a qualified tax professional before taking a capital loss deduction.

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New York, New Jersey Counties Lead in Property Taxes

From Bloomberg.com:

The counties of Westchester, New York, and Hunterdon, New Jersey, charged the highest property tax bills in the U.S. during 2006-2008, the Tax Foundation said. All of the 10 top-paying counties were in the two states.

The median annual tax bill in Westchester, north of New York City, was $8,404 in the three-year period, the Washington, D.C.-based research organization said today in a study based on U.S. Census data. Hunterdon homeowners paid $8,347.

“In seven New Jersey counties and three New York counties, the median property tax over 2006-2008 is more than 7 percent of median household income, compared with the national median of 2.85 percent,” the study said.

New Jersey’s property taxes are an issue in the state’s Nov. 3 election for governor. Democratic incumbent Jon Corzine said on Oct. 23 he would halt growth of property taxes if re- elected. Republican challenger Christopher Christie said he would cut taxes across the board.

New Jersey ranked first among states with a $6,320 median property tax bill in 2008, Census Bureau data last month showed. States with the lowest median real-estate taxes last year were Louisiana, $188; Alabama, $383, and West Virginia, $457, the bureau said.

“The Northeast remains the area with the highest property taxes,” Gerald Prante, a Tax Foundation economist, said at the time. “These states also have high per capita income, and the highest property tax bills, in terms of dollar amounts, are usually found in the areas with the highest incomes.”

The top 10 counties for property tax bills in 2006-2008 were: Westchester, New York, with $8,404; Hunterdon, New Jersey, with $8,347; Nassau, New York, at $8,306; Bergen, New Jersey, with $7,997; Rockland, New York, at $7,798; Essex, New Jersey, with $7,676; Somerset, New Jersey, at $7,676; Morris, New Jersey, with $7,310; Passaic, New Jersey, at $7,095, and Union, New Jersey, with $7,058. The national median is $1,854, the Tax Foundation said.

Questions for the Tax Lady: October 5th, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: How are my property taxes calculated?

Answer: Your property taxes are determined based on your local government’s “assessed” value of the property. The exact rate, and assessment rules will vary widely depending where you live, but there are a few general property tax rules. Generally, a local government agency will either base the taxes off of the home’s most recent sales price, or they might have an assessor regularly determine the current market value of the home. Some government agencies update their records every year, however most simply rely on recent sales prices, which may date back decades.

Question #2: Roni, I recently moved to a new city in the same state. How do I notify the IRS of the change?

Generally speaking, you will not need to worry about officially notifying the IRS about a recent move. If you are a wage earning employee, then you will want to make sure and notify your employer who will likely give you a new IRS Form W2 to complete. Otherwise, next time you file a tax return make sure to list your current address. The IRS will see the change, and automatically update their records.

As Home Values Fall, Your Property Tax Bill Probably Should Decline, Too

From Boston.com:

Why is it that so few taxpayers try to reduce their property taxes? As many as 60 percent of US homes may be overassessed, according to the National Taxpayers Union, but most homeowners don't know how the process works or that they can appeal.

You are likely to have more success this year, because in most areas there is a large disparity between assessed values from the boom years and depressed current market values.

Most likely your home's assessment is out of date since it is based on an average of local values that may go back three years. Since the height of the boom market, prices have declined by 20 to 50 percent.

Appealing your assessment is something anyone can do, yet it is important to do some preparation work. I have been able to lower or freeze my home's assessed value several times.

There's often little accountability in how assessors value your property. They make mistakes, and assessments may be wildly inconsistent in your community.

Check your home's legal description. Does it match precisely your house and lot characteristics? There may be errors in the records on the number of finished rooms, lot size, and interior square footage.

The second step is to determine whether you are fairly assessed. You will need to work out whether similar houses sold at lower prices than your home's current market value. Are there any local features that will reduce your property's value? Railroads, highways, landfills, easements, and rezonings (to commercial) count.

You can present these details to your assessor before you file a formal appeal, but don't expect him to give you a reduction. Most states have bodies that deal specifically with real-estate tax appeals at higher levels.

If you don't feel comfortable researching and filing your own appeal, you can hire an attorney. They are usually compensated by taking a percentage of your tax savings. Appeal boards tend to respect the opinion of a certified real-estate appraiser more than yours. Spend a few hundred dollars to present a recent certified appraisal.

Be professional and precisely document your case. Appeals boards are swamped right now. Ocean County, N.J., for example, is facing more than 14,000 appeals this year.

Typically, you will have just a few minutes to make your appeal. Keep in mind you have to meet strict filing deadlines. Don't expect an immediate reduction in property taxes. Taxing bodies still have the power to raise levies or float referendums if they need funds. Your taxes may rise - even in this market.

If the deadline for appeal has passed this year, start building your case for next year. Definitely mount a challenge if you are in the highest property-tax states - such as Massachusetts.

Saving Money on Property Taxes in the Off Season

Now that tax season has passed, and you’ve got your tax plan for 2009 together (right?), what can you do to save money on taxes? Take a look at your property tax bill. Some experts estimate that 60% of homes are over assessed, meaning higher property tax bills. Property owners are able to apply for reduction in assessment from July 2 – September 15. And the reassessment process can be lengthy, so this is the time to start the process.

First things first, go over your own property tax assessment with a fine tooth-comb. Those records are available at your county assessor’s office. Make sure the square footage, number of bedrooms, bathrooms, etc., is correct. If everything lines up, then review your neighbors’ assessments. Don’t worry—it is all a matter of public record, so you are not invading anyone’s privacy. Review at least 5 neighbors’ records. Your assessment should be within 10% of the average.

If your assessment record is correct, and your assessment is comparable to your neighbors’, then you can argue that the property values have fallen, so you should be taxed at lower rates. Of course, this route involves an administrative review and possibly judicial hearings. Either way lengthens the timeline and can incur additional costs. However, reducing your property taxes can save you money for years to come.

Suozzi: Taxpayers Should 'Revolt' Over Property Taxes

From NewsDay.com:

Taxpayers should "revolt" if the state increases income taxes on upper-income earners without doing something to stabilize property taxes for all state residents, according to Nassau County Executive Thomas Suozzi.

"This country was founded on the rallying cry of 'No taxation without representation;' the rallying cry today should be 'No income tax [increase] without property tax relief,'" Suozzi said in an interview yesterday.

Suozzi has scheduled a news conference today to point out that while Nassau, Suffolk and Westchester counties combined have 18 percent of state's population, they account for 40 percent of the taxpayers in the state with incomes of more than $250,000 - the target of most discussions about taxing high earners.

New York State provides more revenue to Washington than it gets back, downstate provides more revenue to Albany than it gets back, and it would be unfair to the downstate counties with high property taxes to siphon more tax revenue without property tax reform, he said.

"If they do an income tax increase, and they don't to a property tax cap and property tax relief, we should revolt," Suozzi said, his voice rising. "We should rally behind an effort to make that change, and now is the time to do it."

Suozzi said he was convinced that both the state and federal governments would eventually have to increase taxes on higher incomes, but admitted there has been little public support for such a move in Albany beyond the Assembly.

Gov. David A. Paterson said earlier this week that he opposed the higher income tax - dubbed the "fair share tax" by labor unions and other supporters.

Property-Tax Collections Climb as Home Prices Fall

From USA Today.com:

Property taxes are rising across the USA despite the steepest drop in home values since the Great Depression.

Home values dropped 17% in the third quarter compared with the same period in 2007, reports the S&P/Case-Shiller Home Price Index. At the same time, property tax collections across the USA rose 3.1%, according to the U.S. Bureau of Economic Analysis.

State and local governments are on track to collect more than $400 billion in property taxes this year, the most ever. One reason: Laws in most states that prevent big tax hikes when property values soar also block big tax drops when values sink.

The housing market collapse has caused a recession that's hurt sales and income tax collections.

But property taxes — collected mostly for public schools — have escaped serious damage. As a result, public education is one of the few sectors of the economy still adding jobs.

Property Taxes: High in Blue States, Low in Red States

The Tax Foundation has published a study reviewing new census data on property taxes on homeowners. As Tax Prof pointed out, it is interesting to “note that 26 of the 30 highest-tax states in the three categories are Blue States that voted for John Kerry in 2004, and that 24 of the 30 lowest-tax states in the three categories are Red States that voted for George Bush in 2004.” Below is an embedded image of the study’s findings.